After opening lowering following a.....>

GILT SUMMARY: After opening lowering following a sizeable Tory majority in the

General Election, gilts have been drifting higher most of the day, in line with

moves seen in Bunds and USTs.

- At the time of writing, gilt futures had closed the gap to yesterday's lows,

and almost to yesterdays close with gilt futures down -0.02 today at 131.27. 10y

yields are up 0.1bp at 0.819% and 2y yields down -1.2bp at 0.565%.

- The 5-10 year area of the curve has outperformed with 2s5s 1.3bp steeper at

25.4bp and 10s30s 1.9bp flatter at 49.7bp. However, 5s10s are relatively

unchanged on the day. This largely reflects less chance of near-term BoE cuts

and also lower long-term borrowing than would have been expected under a Labour

government.

- Looking ahead to next week, there will still be a number of key events with

the preliminary Markit PMIs on Monday, employment report Tuesday, CPI on

Wednesday, retail sales and the MPC announcement on Thursday while public sector

borrowing and the final print of Q3 GDP round off the week on Friday.